An update from our CEO Nathan Coe
As ever, I hope that you, your family and colleagues are well and are looking forward to the Summer. There has been a lot going on in our industry so it’s important we all take some time to have a break, reflect, and prepare for the busy period from September onwards.
Real-time Market Insight
I’m sure you too feel like every news story has a different take on what’s happening at the moment, although the vast majority focus constantly on the negatives of inflation, rising interest rates and cost of living pressures. These things do make life for people and businesses difficult, but they are not the whole story, we continue to see strong engagement on Auto Trader translating into demand and transactions. Furthermore, we have had many successes working in partnership with retailers who are having a hard time, improving their performance through good advertising, good stock selection and disciplined pricing. If you are finding trading difficult at the moment please do get in touch, we’re here to help.
UK consumers continue to prioritise spend on their next vehicle and the desire for ownership has only grown stronger given recent public transport strikes. What consumers buy, their budget, how they finance, the ownership path they take, and fuel type are all major considerations. We continue to see that the best performing retailers use live market data to make sourcing and pricing decisions to stay abreast of both their competition and the market.
Over 82% of retailers on our platform are now able to benefit from real-time stock updates and our rich vehicle taxonomy available in Retailer Portal and through our Auto Trader Connect – Retail Essentials module. We have recently launched a Valuations module and Vehicle Insight in Portal, so accessing this key decision driving data has never been easier. This comes as part of your package, so represents no additional cost and brings very substantial benefits, if you are not making use of this, I’d urge you to speak to your Account Manager to see how we can help. The margin improvements from accurate vehicle specification, descriptions, and huge time savings are all being confirmed to us from Retailers using these products. You can read more on how these solutions can help you here.
Investing for the future
We continue to invest so that AutoTrader, and your vehicles are front of mind for buyers, and will be investing more this year than ever before. With our latest partnership with Channel 4, you’ll once again see ‘Britain’s Biggest Matchmaker’ on your TV screens this week reaching over 45% of the UK adult population[1]. This is alongside the launch of our consumer podcast ‘Show on the Road’, which is already in the top 1% of podcasts in the UK[2], bringing a fresh and diverse new audience to your vehicles. We’ve also launched a partnership with Global across Capital, Smooth and Heart FM which will reach over 25 million adults this year[1]. This should further improve our already strong engagement figures, with visits last month reaching a staggering 73.7m and 524m minutes up over 10% on 2022. That’s an average of 15 minutes for every UK driving license holder[3]. If you could talk to a potential car buyer for 15 minutes, what would be the message you’d want to get across? It’s worth paying even more attention to your online forecourt than you do your physical forecourt ensuring you’re making the most of every opportunity.
Reasons to remain positive about pricing
One area that remains a concern for many retailers I speak to is how long robust pricing conditions will continue. A combination of sensational headlines about the economy and the 39th consecutive month of price growth has understandably led to some retailers I speak to feeling nervous about how long this trend can go on. It feels important to share the data we are seeing and avoid any unnecessary price reductions.
Year-on-year consumer demand metrics are up 2.3% across used cars with supply down 4.1% year on year which means market health is positive, up 6.7%. Pricing growth not only continues but the pace of growth has accelerated with like-for-like pricing in June up 3.2%, the fastest growth rate we’ve seen for 8 months. With these demand and supply dynamics, the data does not suggest pricing growth is likely to slow.
In the Electric Vehicle market, following a turbulent time, we’re seeing some stabilisation of prices with the month-on-month contraction at -0.9% being the lowest drop since August last year. Whilst days to sell remain higher than other fuel types there are some fast-selling models. The Tesla Model 3 for example was selling in just 19 days in June, the fastest of any model across all fuel types.[4]
I’ve said it many times before, but it remains the best advice I can offer, follow the data and source vehicles based on the retail price you can achieve. There are always profit opportunities to be had and if you need any support with this, we’re always on hand to help, you can also find advice and up-to-date guidance on electric vehicles, particularly around merchandising through our Retailer Performance Masterclass on this topic. You have our data at your fingertips, whether you access this through Auto Trader Connect in your own systems or through Portal where the Vehicle Insight page ensures you can see exactly what is going on with every one of your vehicles. There is no reason to be unsure of the next best step for every car on your forecourt.
Recognising Industry Excellence
This week sees our Highly Rated Retailers announced. This accolade is so important because it’s entirely driven by car buyers telling us through feedback and reviews who has consistently provided outstanding customer service. Reviews are crucial to building trust and confidence with buyers, with a recent survey showing that around 90% of Auto Trader consumers see reviews as important when considering buying their next vehicle[5]. Congratulations to all the recipients of the award, display those Highly Rated awards with pride and share your success on social with the hashtag #athighlyrated2023. If you haven’t managed to meet the very high bar this year, please don’t hesitate to talk to your Account Manager about what you can do to make sure you achieve this over the next 12 months.
I can also share that the 16th edition of our Retailer Awards, celebrating the best of the best in our industry will take place on the 18th October, and we’ll be opening up our self-nomination categories today. You’ll receive a link to submit by email or you can get all the details you need here.
As I and the entire Auto Trader teamwork to continue to strengthen our partnership, I welcome any feedback on opportunities for Auto Trader to support your success.
All the best for the remainder of the Summer,
Nathan Coe
Sources
[1] Nielsen – TGI Channel Planner
[2] Apple podcast rankings
[3] Auto Trader internal data
[4] Auto Trader Retail Price Index
[5] Auto Trader internal data
